Whilst banks are accustomed to identifying, setting and tracking climate targets related to the financed emissions of their portfolio, no equivalent methodology is currently available for nature impact at the portfolio level.

Co-authored by UNEP FI and the United Nations Environment Programme World Conservation Monitoring Centre (UNEP-WCMC), the new “Nature Impact Target Setting for Banks” discussion paper proposes an approach for banks to set impact targets for nature – targets that aim to achieve an improvement in the state of nature through a set reduction of pressures across a bank’s lending, investing, and underwriting activities.

Building on the previous PRB Biodiversity Target Setting Guidance and Nature Target Setting Guidance, as well as existing frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD) Locate, Evaluate, Assess, and Prepare (LEAP) approach and the Science Based Targets Network (SBTN) target-setting process, the approach is structured into two phases:

  • Phase 1: Identification covering the collection of key nature-related data points for specific groups of clients, including priority pressures and dependencies, in order to understand the clients’ impact on the state of nature.
  • Phase 2: Target setting and action planning focusing on how banks can set impact targets and take action, working with their clients to achieve targets.

The discussion paper includes illustrative practical examples showcasing how a bank could move through each step of the approach, in addition to the known limitations and challenges a bank may face.

This discussion paper intends to solicit feedback from banks and relevant civil society bodies on a proposed approach for banks to set impact targets for nature. The approach, set out here for feedback and discussion, is designed with the intention to provide guidance for banks aiming to reduce negative nature-related impacts. This would increase banks’ ambition on nature and contribute to the vision, ambition, goals and targets of the Kunming-Montreal Global Biodiversity Framework.

 

Interested in providing feedback?

UNEP FI and UNEP-WCMC are seeking feedback on the proposed approach from banks and relevant civil society associations. If you are a bank that: (1) would like a more detailed feedback discussion; (2) is looking to provide additional perspectives on challenges and limitations, (3) has a solution to the proposed challenges/limitations; or (4) is interested in piloting the approach, please reach out to Sam Burke.